Moody's lifts Gala Electric

Moody's Investors Service said it upgraded the corporate family rating of Gala Electric Casinos Plc to B3 from Caa1, along with its probability of default rating to B3-PD from Caa1-PD.

It also upgraded the rating of the £275 million senior notes due 2019 to Caa2 from Caa3 and the rating of the £350 million senior secured notes due 2018 issued by Gala Group Finance plc to B2 from B3.

The outlook is stable.

The upgrade reflects a view that the company's operating performance in 2013 will be better than expected as a result of improvement in the core Coral and growing Gala interactive divisions, offsetting underperformance in Gala Bingo and Coral Interactive, Moody's said.

The upgrade also assumes that the company's sale of the majority of its casinos will further reduce leverage in 2013 and that this trend will continue in 2014, driven by the recent capital expenditure investment in the Coral and interactive divisions, as well as the World Cup and a full year of having new Infinity cabinets in place, the agency said.

Moody's said it is concerned about recent deteriorating results at Gala Bingo and poor performance at Coral Interactive, the other divisions are expected to more than compensate.

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